Question 1

For a given year,Rogers Express paid $318 in interest,$460 in dividends,and $368 in taxes.The firm had a net income of $1,220,depreciation of $1,560,an increase in net working capital of $220,an increase in net fixed assets of $950,and a decrease in long-term debt of $260.There were no changes in the equity accounts other than the change in retained earnings.What is the annual cash flow of the firm?

Accepted Answer

A)  $3,148
B)  $1,610
C)  $2,780
D)  $1,038
E)  $50F) A) and C)
G) C) and E)

Question 2

JK Meadows has beginning current liabilities of $14,602 and total liabilities of $35,418.At the end of the year,the current liabilities are $15,311 and the total liabilities are $37,604.During the year,the firm paid $680 in dividends and $1,320 in interest.What is the cash flow to creditors?

Accepted Answer

A)  $3,230
B)  $2,797
C)  $3,135
D)  −$157
E)  −$267F) C) and E)
G) A) and D)

Question 3

A firm's dividend payments less any net new equity raised is referred to as the firm's:

Accepted Answer

A)  operating cash flow.
B)  capital spending.
C)  net working capital.
D)  cash flow from creditors.
E)  cash flow to stockholders.F) C) and D)
G) B) and E)

Question 4

Which one of the following accounts is included in stockholders' equity?

Accepted Answer

A)  Long-term debt
B)  Deferred taxes
C)  Plant and equipment
D)  Accumulated retained earnings
E)  Dividends paidF) A) and D)
G) D) and E)

Question 5

Total equity is $1,620,fixed assets are $1,810,long-term debt is $650,and short-term debt is $300.What is the amount of current assets?

Accepted Answer

A)  $760
B)  $360
C)  $1,140
D)  $480
E)  $790F) All of the above
G) C) and E)

Question 6

At the beginning of the year,long-term debt of a firm is $2,400 and total debt is $3,150.At the end of the year,long-term debt is $2,800 and total debt is $4,370.The interest paid is $40.What is the amount of the cash flow to creditors?

Accepted Answer

A)  $440
B)  −$40
C)  $1,260
D)  $1,180
E)  −$360F) A) and B)
G) A) and C)

Question 7

For a tax-paying firm,an increase in the depreciation expense of $1 will:

Accepted Answer

A)  reduce net income by $1.
B)  increase net income by $1.
C)  reduce net income by more than $1.
D)  reduce net income by less than $1.
E)  increase net income by less than $1.F) A) and D)
G) A) and E)

Question 8

Depreciation is classified as a noncash item because no cash is spent when depreciation is recorded.Why are expenses that have been accrued,but not yet paid,not also considered to be noncash items and therefore excluded from operating cash flow just as depreciation is excluded?

Accepted Answer

Accrued expenses will appear in accounts...

Question 9

The cash flow to stockholders must be positive when:

Accepted Answer

A)  the dividends paid are less than the amount of net new equity raised.
B)  the net sale of common stock exceeds the amount of dividends paid.
C)  no income is distributed but new shares of stock are sold.
D)  the cash flow from assets is positive and exceeds the cash flow to creditors.
E)  both the cash flow to assets and the cash flow to creditors are positive.F) A) and D)
G) A) and C)

Question 10

Which one of the following is a current liability?

Accepted Answer

A)  Amount due to a supplier in 18 months
B)  Note payable in nine months
C)  Estimated taxes just paid
D)  Loan payment due in 13 months
E)  Amount due from a customer in 30 daysF) A) and B)
G) A) and C)

Question 11

If you sell an asset,you are most apt to receive which value for that asset?

Accepted Answer

A)  Market value
B)  Original cost minus accumulated depreciation
C)  Historical value
D)  Book value
E)  Carrying valueF) None of the above
G) A) and E)

Question 12

At the beginning of this year,Blauser Industries had net fixed assets of $21,506 and total assets of $32,687.At year's end,net fixed assets are $20,492 and total assets are $32,915.The annual depreciation expense is $1,520.What is net capital spending for this year?

Accepted Answer

A)  −$850
B)  $506
C)  −$1,292
D)  −$2,534
E)  $1,748F) A) and B)
G) A) and C)

Question 13

The accounting statement of cash flows consists of the cash flows from:

Accepted Answer

A)  operations,investing activities,and financing activities.
B)  operations,investing activities,and divesting activities.
C)  internal activities,external activities,and financing activities.
D)  balance sheet accounts only.
E)  income statement accounts only.F) B) and C)
G) A) and E)

Question 14

From a financial perspective,why is interest expense excluded from the operating cash flow?

Accepted Answer

Operating cash flow is designed to repre...

Question 15

Under Generally Accepted Accounting Principles (GAAP) ,a firm's assets are reported at:

Accepted Answer

A)  market value.
B)  liquidation value.
C)  market value less accumulated depreciation.
D)  historical cost less accumulated depreciation.
E)  liquidation value less accumulated depreciation.F) B) and E)
G) A) and B)

Question 16

The cash flow of the firm must be equal to the:

Accepted Answer

A)  cash flow to stockholders minus the cash flow to creditors.
B)  cash flow to creditors minus the cash flow to stockholders.
C)  cash flow to governments plus the cash flow to stockholders.
D)  cash flow to stockholders plus the cash flow to creditors.
E)  aftertax operating cash flow.F) B) and E)
G) A) and B)

Question 17

Which one of the following assets is generally the most liquid?

Accepted Answer

A)  Inventory
B)  Buildings
C)  Accounts receivable
D)  Equipment
E)  PatentsF) A) and D)
G) C) and D)

Question 18

Assets are listed on the balance sheet in order of:

Accepted Answer

A)  decreasing liquidity.
B)  acquisition.
C)  increasing size.
D)  market value relative to book value.
E)  book value.F) A) and E)
G) B) and E)

Question 19

Cash flow from assets:

Accepted Answer

A)  equals net income plus non-cash items.
B)  can be positive,negative,or equal to zero.
C)  equals operating cash flow minus net capital spending.
D)  equals the addition to retained earnings.
E)  equals operating cash flow minus the cash flow to creditors.F) A) and E)
G) C) and E)

Question 20

Which one of these accounts appears on the right-hand side of a balance sheet?

Accepted Answer

A)  Property,plant,and equipment
B)  Accumulated retained earnings
C)  Accumulated depreciation
D)  Cash and equivalents
E)  Intangible assetsF) C) and E)
G) B) and C)

Exam 2: Financial Statements and Cash Flow

Total equity is $1,620,fixed assets are $1,810,long-term debt is $650,and short-term debt is $300.What is the amount of current assets?

Correct Answer
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The cash flow to stockholders must be positive when:

Correct Answer
verified

If you sell an asset,you are most apt to receive which value for that asset?

Correct Answer
verified

From a financial perspective,why is interest expense excluded from the operating cash flow?

Correct Answer
verified
Operating cash flow is designed to repre...
View Answer

At the beginning of this year,Blauser Industries had net fixed assets of $21,506 and total assets of $32,687.At year's end,net fixed assets are $20,492 and total assets are $32,915.The annual depreciation expense is $1,520.What is net capital spending for this year?

Correct Answer
verified

Under Generally Accepted Accounting Principles (GAAP) ,a firm's assets are reported at:

Correct Answer
verified

Which one of the following assets is generally the most liquid?

Correct Answer
verified

Which one of the following accounts is included in stockholders' equity?

Correct Answer
verified

Cash flow from assets:

Correct Answer
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At the beginning of the year,long-term debt of a firm is $2,400 and total debt is $3,150.At the end of the year,long-term debt is $2,800 and total debt is $4,370.The interest paid is $40.What is the amount of the cash flow to creditors?

Correct Answer
verified

A firm's dividend payments less any net new equity raised is referred to as the firm's:

Correct Answer
verified

Depreciation is classified as a noncash item because no cash is spent when depreciation is recorded.Why are expenses that have been accrued,but not yet paid,not also considered to be noncash items and therefore excluded from operating cash flow just as depreciation is excluded?

Correct Answer
verified
Accrued expenses will appear in accounts...
View Answer

Which one of these accounts appears on the right-hand side of a balance sheet?

Correct Answer
verified

The accounting statement of cash flows consists of the cash flows from:

Correct Answer
verified

JK Meadows has beginning current liabilities of $14,602 and total liabilities of $35,418.At the end of the year,the current liabilities are $15,311 and the total liabilities are $37,604.During the year,the firm paid $680 in dividends and $1,320 in interest.What is the cash flow to creditors?

Correct Answer
verified

The cash flow of the firm must be equal to the:

Correct Answer
verified

Assets are listed on the balance sheet in order of:

Correct Answer
verified

Correct Answer
verified

For a tax-paying firm,an increase in the depreciation expense of $1 will:

Correct Answer
verified

Which one of the following is a current liability?

Correct Answer
verified

Exam 2: Financial Statements and Cash Flow

Total equity is $1,620,fixed assets are $1,810,long-term debt is $650,and short-term debt is $300.What is the amount of current assets?

Correct AnswerverifiedShow Answer

The cash flow to stockholders must be positive when:

Correct AnswerverifiedShow Answer

If you sell an asset,you are most apt to receive which value for that asset?

Correct AnswerverifiedShow Answer

From a financial perspective,why is interest expense excluded from the operating cash flow?

Correct AnswerverifiedOperating cash flow is designed to repre...View AnswerShow Answer

At the beginning of this year,Blauser Industries had net fixed assets of $21,506 and total assets of $32,687.At year's end,net fixed assets are $20,492 and total assets are $32,915.The annual depreciation expense is $1,520.What is net capital spending for this year?

Correct AnswerverifiedShow Answer

Under Generally Accepted Accounting Principles (GAAP) ,a firm's assets are reported at:

Correct AnswerverifiedShow Answer

Which one of the following assets is generally the most liquid?

Correct AnswerverifiedShow Answer

Which one of the following accounts is included in stockholders' equity?

Correct AnswerverifiedShow Answer

Cash flow from assets:

Correct AnswerverifiedShow Answer

At the beginning of the year,long-term debt of a firm is $2,400 and total debt is $3,150.At the end of the year,long-term debt is $2,800 and total debt is $4,370.The interest paid is $40.What is the amount of the cash flow to creditors?

Correct AnswerverifiedShow Answer

A firm's dividend payments less any net new equity raised is referred to as the firm's:

Correct AnswerverifiedShow Answer

Depreciation is classified as a noncash item because no cash is spent when depreciation is recorded.Why are expenses that have been accrued,but not yet paid,not also considered to be noncash items and therefore excluded from operating cash flow just as depreciation is excluded?

Correct AnswerverifiedAccrued expenses will appear in accounts...View AnswerShow Answer

Which one of these accounts appears on the right-hand side of a balance sheet?

Correct AnswerverifiedShow Answer

The accounting statement of cash flows consists of the cash flows from:

Correct AnswerverifiedShow Answer

JK Meadows has beginning current liabilities of $14,602 and total liabilities of $35,418.At the end of the year,the current liabilities are $15,311 and the total liabilities are $37,604.During the year,the firm paid $680 in dividends and $1,320 in interest.What is the cash flow to creditors?

Correct AnswerverifiedShow Answer

The cash flow of the firm must be equal to the:

Correct AnswerverifiedShow Answer

Assets are listed on the balance sheet in order of:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

For a tax-paying firm,an increase in the depreciation expense of $1 will:

Correct AnswerverifiedShow Answer

Which one of the following is a current liability?

Correct AnswerverifiedShow Answer

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Correct Answer
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Correct Answer
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Correct Answer
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Operating cash flow is designed to repre...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Accrued expenses will appear in accounts...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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